Stephen Bainbridge's Journal of Law, Religion, Politics, and Culture

06/08/2010

Are Conservatives Smarter at Economics than Liberals?

An op-ed by Daniel Klein in today's WSJ would lead to that conclusion:

Who is better informed about the policy choices facing the country—liberals, conservatives or libertarians? According to a Zogby International survey that I write about in the May issue of Econ Journal Watch, the answer is unequivocal: The left flunks Econ 101.

Zogby researcher Zeljka Buturovic and I considered the 4,835 respondents' (all American adults) answers to eight survey questions about basic economics. We also asked the respondents about their political leanings: progressive/very liberal; liberal; moderate; conservative; very conservative; and libertarian.

Rather than focusing on whether respondents answered a question correctly, we instead looked at whether they answered incorrectly. A response was counted as incorrect only if it was flatly unenlightened.

Consider one of the economic propositions in the December 2008 poll: "Restrictions on housing development make housing less affordable." People were asked if they: 1) strongly agree; 2) somewhat agree; 3) somewhat disagree; 4) strongly disagree; 5) are not sure.

Basic economics acknowledges that whatever redeeming features a restriction may have, it increases the cost of production and exchange, making goods and services less affordable. There may be exceptions to the general case, but they would be atypical.

Therefore, we counted as incorrect responses of "somewhat disagree" and "strongly disagree." This treatment gives leeway for those who think the question is ambiguous or half right and half wrong. They would likely answer "not sure," which we do not count as incorrect.

In this case, percentage of conservatives answering incorrectly was 22.3%, very conservatives 17.6% and libertarians 15.7%. But the percentage of progressive/very liberals answering incorrectly was 67.6% and liberals 60.1%. The pattern was not an anomaly.

The other questions were: 1) Mandatory licensing of professional services increases the prices of those services (unenlightened answer: disagree). 2) Overall, the standard of living is higher today than it was 30 years ago (unenlightened answer: disagree). 3) Rent control leads to housing shortages (unenlightened answer: disagree). 4) A company with the largest market share is a monopoly (unenlightened answer: agree). 5) Third World workers working for American companies overseas are being exploited (unenlightened answer: agree). 6) Free trade leads to unemployment (unenlightened answer: agree). 7) Minimum wage laws raise unemployment (unenlightened answer: disagree).

How did the six ideological groups do overall? Here they are, best to worst, with an average number of incorrect responses from 0 to 8: Very conservative, 1.30; Libertarian, 1.38; Conservative, 1.67; Moderate, 3.67; Liberal, 4.69; Progressive/very liberal, 5.26.

Americans in the first three categories do reasonably well. But the left has trouble squaring economic thinking with their political psychology, morals and aesthetics.

To be sure, none of the eight questions specifically challenge the political sensibilities of conservatives and libertarians. Still, not all of the eight questions are tied directly to left-wing concerns about inequality and redistribution. In particular, the questions about mandatory licensing, the standard of living, the definition of monopoly, and free trade do not specifically challenge leftist sensibilities.

Yet on every question the left did much worse. On the monopoly question, the portion of progressive/very liberals answering incorrectly (31%) was more than twice that of conservatives (13%) and more than four times that of libertarians (7%). On the question about living standards, the portion of progressive/very liberals answering incorrectly (61%) was more than four times that of conservatives (13%) and almost three times that of libertarians (21%).

As satisfying as these results may seem for those of us on the right of center, I'm afraid I don't find their analysis very persuasive.

For example, the empirical evidence supporting the supposedly enlightened answers to some of the questions is contested. In theory, for example, minimum wage laws ought to result in higher unemployment. "Recent evidence from the USA and the UK claims to show, however, that employment rises when minimum wage laws are introduced and falls when such laws are repealed." (Link)

Other questions lack nuance. The impact of free trade policies on employment is obviously complex. If free trade results in a country being flooded with cheap goods from a country with a comparative advantage in producing them, the industry in question obviously is going to see negative employment effects. Free trade policies (open borders and low tariffs) could disadvantage an economy in competition with closed markets. More generally, the problem of comparing short-term costs and long-term benefits is fraught with peril.

Finally, an informed lefty might say: So what? The enlightened answer to all of the questions assumes that the sole consideration is allocative efficiency. Many of the questions, however, implicate distributional concerns and the unenlightened answers thus invoke political priors of those on the left. Conversely, the enlightened answer to each question accords with the political priors of conservatives and liberals. In sum, the test suggests two falsifiable hypotheses: (1) Conservatives and libertarians are better informed about economics than liberals. (2) The people who took the test answered the questions based not on economic knowledge but on their political priors. Klein's results can't falsify either hypothesis.

I'm prepared to assume that conservatives are smarter than liberals at least when it comes to Econ 101. (it accords with both my priors and 20+ years experience in academia.) But Klein's research doesn't prove the proposition.

Comments

Are Conservatives Smarter at Economics than Liberals?

An op-ed by Daniel Klein in today's WSJ would lead to that conclusion:

Who is better informed about the policy choices facing the country—liberals, conservatives or libertarians? According to a Zogby International survey that I write about in the May issue of Econ Journal Watch, the answer is unequivocal: The left flunks Econ 101.

Zogby researcher Zeljka Buturovic and I considered the 4,835 respondents' (all American adults) answers to eight survey questions about basic economics. We also asked the respondents about their political leanings: progressive/very liberal; liberal; moderate; conservative; very conservative; and libertarian.

Rather than focusing on whether respondents answered a question correctly, we instead looked at whether they answered incorrectly. A response was counted as incorrect only if it was flatly unenlightened.

Consider one of the economic propositions in the December 2008 poll: "Restrictions on housing development make housing less affordable." People were asked if they: 1) strongly agree; 2) somewhat agree; 3) somewhat disagree; 4) strongly disagree; 5) are not sure.

Basic economics acknowledges that whatever redeeming features a restriction may have, it increases the cost of production and exchange, making goods and services less affordable. There may be exceptions to the general case, but they would be atypical.

Therefore, we counted as incorrect responses of "somewhat disagree" and "strongly disagree." This treatment gives leeway for those who think the question is ambiguous or half right and half wrong. They would likely answer "not sure," which we do not count as incorrect.

In this case, percentage of conservatives answering incorrectly was 22.3%, very conservatives 17.6% and libertarians 15.7%. But the percentage of progressive/very liberals answering incorrectly was 67.6% and liberals 60.1%. The pattern was not an anomaly.

The other questions were: 1) Mandatory licensing of professional services increases the prices of those services (unenlightened answer: disagree). 2) Overall, the standard of living is higher today than it was 30 years ago (unenlightened answer: disagree). 3) Rent control leads to housing shortages (unenlightened answer: disagree). 4) A company with the largest market share is a monopoly (unenlightened answer: agree). 5) Third World workers working for American companies overseas are being exploited (unenlightened answer: agree). 6) Free trade leads to unemployment (unenlightened answer: agree). 7) Minimum wage laws raise unemployment (unenlightened answer: disagree).

How did the six ideological groups do overall? Here they are, best to worst, with an average number of incorrect responses from 0 to 8: Very conservative, 1.30; Libertarian, 1.38; Conservative, 1.67; Moderate, 3.67; Liberal, 4.69; Progressive/very liberal, 5.26.

Americans in the first three categories do reasonably well. But the left has trouble squaring economic thinking with their political psychology, morals and aesthetics.

To be sure, none of the eight questions specifically challenge the political sensibilities of conservatives and libertarians. Still, not all of the eight questions are tied directly to left-wing concerns about inequality and redistribution. In particular, the questions about mandatory licensing, the standard of living, the definition of monopoly, and free trade do not specifically challenge leftist sensibilities.

Yet on every question the left did much worse. On the monopoly question, the portion of progressive/very liberals answering incorrectly (31%) was more than twice that of conservatives (13%) and more than four times that of libertarians (7%). On the question about living standards, the portion of progressive/very liberals answering incorrectly (61%) was more than four times that of conservatives (13%) and almost three times that of libertarians (21%).

As satisfying as these results may seem for those of us on the right of center, I'm afraid I don't find their analysis very persuasive.

For example, the empirical evidence supporting the supposedly enlightened answers to some of the questions is contested. In theory, for example, minimum wage laws ought to result in higher unemployment. "Recent evidence from the USA and the UK claims to show, however, that employment rises when minimum wage laws are introduced and falls when such laws are repealed." (Link)

Other questions lack nuance. The impact of free trade policies on employment is obviously complex. If free trade results in a country being flooded with cheap goods from a country with a comparative advantage in producing them, the industry in question obviously is going to see negative employment effects. Free trade policies (open borders and low tariffs) could disadvantage an economy in competition with closed markets. More generally, the problem of comparing short-term costs and long-term benefits is fraught with peril.

Finally, an informed lefty might say: So what? The enlightened answer to all of the questions assumes that the sole consideration is allocative efficiency. Many of the questions, however, implicate distributional concerns and the unenlightened answers thus invoke political priors of those on the left. Conversely, the enlightened answer to each question accords with the political priors of conservatives and liberals. In sum, the test suggests two falsifiable hypotheses: (1) Conservatives and libertarians are better informed about economics than liberals. (2) The people who took the test answered the questions based not on economic knowledge but on their political priors. Klein's results can't falsify either hypothesis.

I'm prepared to assume that conservatives are smarter than liberals at least when it comes to Econ 101. (it accords with both my priors and 20+ years experience in academia.) But Klein's research doesn't prove the proposition.